Seismic Political Shift In Alberta, Canada
Imagine if Texas, Oklahoma or Wyoming suddenly switched from overwhelmingly conservative/Republican to progressive/Democratic. It happened yesterday in Alberta Canada; the most conservative part of Canada where agriculture and energy interests has dominated the political landscape. The New Democratic Party (pretty far left of center) went from 4 seats to 53 seats in one election in an 87-seat legislature. The Progressive Conservatives had been in power for 45 years. You can imagine that the energy sector is scrambling to assess the potential damage to its interests.
There’s an investment message in this seismic election shift. Political risk is hard assess and discount. In most instances, recent elections have not been decisive enough to dramatically shift policy. However every now again an election comes along that upsets the market’s equilibrium. The NDP’s victory is roiling Canadian energy stocks, much like Syriza’s victory in the Greek elections unsettled the financial markets in January.